Another BitFinex-Tether Limited saga, another double standard claim and another summoning. That’s what the sphere has to get accustomed to with the company behind USDT, individuals that happen to be behind one of the world’s most liquid and crucial exchange, BitFinex.
On Thursday, Apr-25, 2019, documents from the New York Attorney General Office revealed that the exchange “raided” reserves of the fiat backed USDT in an alleged plot to cover $850 million that had gone missing after the Hong-Kong based exchange failed to recover funds it had sent to Tether accounts in Panama. But what’s intriguing is that Tether (USDT), the main stable coin that the Tether Limited says is pegged 1-to-1 against the USD, is yet to be audited, continues to plunge in one scandal after the other and this is the second major revelation by US authorities that the exchange is involved in malpractices that bear deep repercussion in the space, reeling and recovering from evidence of entrenched manipulation. In response, prices of Bitcoin (BTC) plunged back to $5,100 triggering a $10 billion loss across the board before stabilizing.
NY Attorney Office Suing iFinex
According to Letitia James, the Attorney General of the stringent NY, iFinex, the firm behind the under-siege exchange said the ramp’s officials have been mixing their clients and corporate finds for them to effectively “hide” the missing millions which accounts for around 30 percent of the stable coin’s market cap.
To that end, the office has issued orders to iFinex to stop any form of moving funds between BitFinex and Tether reserve accounts, halt any form of dividend payment to executives and simultaneously turn over any document or information as the court seeks to go deeper, effectively suing the exchange and unravel the plot behind this multi-million short fall.
The NY Attorney office has their lenses on BitFinex, and in their documents, claim that the exchange did promote “issuance, distribution, exchange, advertisement, negotiation, purchase, investment advice, or sale of securities”, an activity that is illegal in their jurisdiction.
Whale Alert: Stolen Bitcoin Moving
While at it, 300 BTC which was part of the loot not recovered when BitFinex was hacked back in 2016 are now moving. Online sleuths tracked these monies to 13 different addresses with no transaction history meaning the identity of the hacks will remain a mystery, unless otherwise they try liquidating for fiat. At spot rates, the stash is worth $1.575 million and at the time, it is said had the exchange had to cover for a $73 million loss after a 120,000 BTC leak.